Municipal Bankruptcy - Harrisburg, PA Making Headlines

(Reuters) - If knee-jerk reactions could be taxed, Pennsylvania's capital city could be closer to escaping its $315 million financial hole.

David Unkovic, the man the state appointed three weeks ago to find a way out for debt-ridden Harrisburg, initially faced a barrage of criticism, particularly regarding his past relationships with large creditors of the city.
However, he appears to be converting critics while maintaining his pledge that everyone will feel pain when he unveils his recovery plan for the city.

Unkovic was applauded by 150 people who visited a city bookstore Monday evening to hear what he had to say about his work in developing that plan.

"I want to commend you on some of your comments last week, especially concerning the fact that any credible workout to this issue is going to have to have some clawbacks in relation to the outstanding debt and our creditors," Harrisburg resident Bruce Webber told Unkovic.

Among the attendees were members of Occupy Harrisburg and Debt Watch Harrisburg, a group that has favored bankruptcy instead of a state takeover.

The 57-year-old receiver, who drew public scorn from some of the same people because of his ties to several of the creditors who are suing Harrisburg, garnered approval after the only resident to object to his appointment questioned his political ties to Republican Governor Tom Corbett.

"I'm not a Republican either, by the way. I am a Democrat but I am not a partisan person," Unkovic said.
Harrisburg's city council filed for Chapter 9 bankruptcy protection earlier in the fall, but the case was dismissed by a federal judge, paving the way for a state takeover of the city's finances. The state capital is struggling under the weight of more than $300 million in debt from a revamp of its incinerator.

"Fortunately, you don't have a political agenda . your (concern) is the 48,500 people of the City of Harrisburg," said a city employee and member of AFSCME, one of the unions that's been asked to accept concessions in budget talks for 2012.

A member of Occupy Harrisburg, an offshoot of Occupy Wall Street, even appeared to sympathize with Unkovic's task ahead when he asked, "Why did you take this job?"

Unkovic said he's met with every elected official involved in Harrisburg's debt crisis and talked with many groups, including Occupy Harrisburg and the host of Monday evening's forum, Harrisburg Hope.
He said he created a website, www.pa.gov/harrisburgreceiver, to give people a chance to share ideas about how to get the city out of debt.

Unkovic has petitioned Commonwealth Court to give him an additional 30 days to submit his recovery plan for Harrisburg, which would give him until early February, if approved.

He said he plans to stay on as receiver only as long as it takes to turn around the city.
"I'm going to go away as soon as I can. That's my plan," said Unkovic.

Read the rest of this entry »

Posted in harrisburg bankruptcy , Municipal Bankruptcy , pennsylvania bankruptcy

Saab Bankruptcy Leads to Warranty Concerns

SAAB, a company that was once renowned for style and sophistication, a thinking person's car, is now in its death rattle.

After its parent company, Swedish Automobile NV, applied to a Swedish court to put three critical parts of the enterprise, Saab Automobile, Saab Powertrain and Saab Automobile Tools, into bankruptcy, the status of warranties on new Saab cars sold here remains under a cloud.

There are about 50 unsold new Saabs in local dealerships and in the Australian distributor's stock, on top of sold Saabs still under warranty.

Last year, Saab sold just 14 cars Australia-wide from eight dealerships. This year it faired better with the release of a new 9-5 model in April, which boosted the brand's sales tally to 139 cars so far.

As the Swedish court is yet to appoint an administrator, it was too early to know how the factory-backed warranty applied, the managing director of the local distributor Saab Cars Australia, Stephen Nicholls, said.
''The new car warranty provision is held by the factory in Sweden, which is one of the entities that's gone into bankruptcy,'' he said.

''At the moment were seeking clarification from the factory how that's going to work.
''That is something that's a question mark.''

Saab spare parts supply is secure, as the global parts distribution company, Saab Parts AB, continues to trade normally, Mr Nicholls said.

Production of Saabs in Sweden has halted and there are no further shipments en route to Australia.
A similar warranty concern confronted Rover and MG buyers when the British group became insolvent in 2005.

In Australia, Rover and MG warranties were honored after dealers rallied to find a reinsurer willing to take on the risk - an approach Saab might follow.

''That's a logical alternative that would be evaluated, but we're not doing anything on that front at the moment,'' Mr Nicholls said.

Mr Nicholls said he expected that Saab would maintain eight dealerships, its 20 authorised repairers and the six staff at Saab Australia.

''Our plan is to cut our costs locally, restructure a little bit, and carry on supplying parts for the dealers,'' he said.

Already the cars are being heavily discounted, with one online retailer slashing $11,000 from the Saab 9-3 model and $16,000 from the Saab 9-5.

The Australian Competition and Consumer Commission was still researching the issue last night after being approached for comment.

Read more: http://www.smh.com.au/national/saab-bankruptcy-leads-to-warranty-concerns-20111220-1p41t.html#ixzz1h5NjGAlj

Read the rest of this entry »

Posted in automaker bankruptcy , Saab bankruptcy

Dodgers, Fox Battle Over Media Rights Sale

WILMINGTON, Del. (AP) — Attorneys for the Los Angeles Dodgers and Fox Sports squared off in court Wednesday over the team's plan to sell the media rights to games starting in 2014 as part of its plan to exit bankruptcy.
The Dodgers are asking a U.S. Bankruptcy Court judge in Delaware to approve a process for selling the television rights to future games as part of a settlement with Major League Baseball that also calls for the sale of the team and Dodger Stadium.

Fox, whose Prime Ticket subsidiary owns the current television contract with the Dodgers, is challenging the proposed sale process, saying it would violate Fox's rights under the existing contract. That contract gives Fox an exclusive 45-day period starting in October 2012 to negotiate a new TV deal and prohibits the Dodgers from talking to any other party until Nov. 30 of next year.

The Dodgers contend that a sale of the media rights is the best way to maximize value for the team's creditors and emerge from bankruptcy in a timely fashion.

"It's an obvious place to look for liquidity and long-term stability for the company," said Tim Coleman, a senior managing director for Blackstone Advisory Partners, which is acting as financial adviser to the Dodgers.

But Fox maintains that a media rights sale would result in the Dodgers breaching their existing contract with Fox, leaving the team subject to potential legal claims that could drive down the price potential buyers would be willing to pay for the club.

Coleman disagreed, testifying that even if Fox loses out on bidding for the future television rights, it would not mean a damage claim against the Dodgers or the team's new owner. Coleman said Fox would have virtually the same rights under the proposed sale process as it has now, including an exclusive 45-day negotiating period, with the major difference being that the timetable for reaching a new TV deal would be bumped up by 10½ months. The settlement with Major League Baseball calls for a sale of the team and its assets, including the future media rights, to be completed by April 30.
"The procedures are essentially the exact same procedures as Fox has today, other than dates," Coleman said.

The Dodgers also note that the proposed sale process includes a provision for Judge Kevin Gross to decide whether the media rights sale would result in any damage to Fox and to estimate any payments to which Fox might be entitled as a result. If such payments threatened to significantly reduce the benefits of the media rights sale, the Dodgers could call it off.

But attorneys for Fox Sports argued that the sale process would give a buyer of the Dodgers the ability to reject any new TV deal reached with Fox, something they said the current contract does not allow.
Fox attorney Greg Werkheiser warned that the dispute over the proposed media rights sale could prompt the network to withhold a January royalty payment to the Dodgers that Werkheiser said was at least in the millions of dollars, if not tens of millions.

"We're not going to be able to sit around and wait to see if we're being injured in the process and cough up a large sum of money when we're not getting the benefit of the bargain," Werkheiser said.
The Dodgers sought bankruptcy protection in June after baseball Commissioner Bud Selig refused to approve a new TV deal with Fox that Dodgers owner Frank McCourt was counting on to keep the franchise solvent.

The Dodgers subsequently argued in bankruptcy court that auctioning off the television rights to future games was the best way to maximize the value of the bankruptcy estate for the benefit of all stakeholders.

The league disagreed, saying any plan to sell television rights without its approval was "dead on arrival" and would spell the end of the club. League attorneys argued that such a sale would breach the Dodgers' existing contract with Fox and provide grounds for termination of the franchise for failure to abide by MLB agreements.

But after battling with the Dodgers over control of the ballclub and seeking to force McCourt to sell the team, MLB reached a settlement last month with the help of a court-appointed mediator. Many of the settlement terms remain confidential, including procedures regarding the sale of the Dodgers, approval of prospective buyers, and how the league would apply MLB rules and regulations to the media rights sale.

The proposed sale would include the team and Dodger Stadium, but not the parking lots and land surrounding the stadium, which are owned by a separate company that is controlled by McCourt and not involved in the bankruptcy. The settlement between the Dodgers and MLB gives McCourt sole discretion to sell the parking lots and land surrounding the stadium.

While decrying the secrecy surrounding the settlement, Fox attorneys have zeroed in on the proposed sale deadline of April 30, which also happens to be the deadline for McCourt to pay his ex-wife, Jamie, $131 million as part of their divorce settlement.

Werkheiser accused McCourt of trying to "whiplash" the bankruptcy court into hastily approving a sale of the team and the media rights in order to meet his personal financial commitment under the divorce settlement.

But when Fox attorneys pressed Coleman about why the April 30 sale date was chosen, Dodgers attorneys objected, saying details of the mediation talks that led to the settlement were confidential. The judge agreed.

Testimony was scheduled to resume Thursday morning.

Read the rest of this entry »

Posted in Dodgers Bankruptcy , Media Rights

Obama Administration Considered a Bailout for Solyndra Before Bankruptcy

According to an article published by Fox News:

WASHINGTON –  A Republican-led House panel voted Thursday to subpoena the White House for records related to Solyndra, the solar company that collapsed after receiving a $528 million loan. 

The House Energy and Commerce Committee approved the resolution 14-9 after Democrats tried to delay the vote during a contentious debate. 

Democrats argued the resolution was too broad and gave Chairman Fred Upton too much power. But Republicans said a subpoena was necessary because the White House has denied or delayed requests for thousands of documents related to Solyndra.

Upton, a Michigan Republican, said getting White House documents on Solyndra was like "extracting a tooth without anesthesia" -- painful and time-consuming.

The White House immediately slammed the vote, saying it has "cooperated extensively with the committee's investigation by producing over 85,000 pages of documents, including 20,000 pages produced just yesterday afternoon."

"And all of the materials that have been disclosed affirm what we said on Day One: this was a merit-based decision made by the Department of Energy," White House spokesman Eric Schultz said.

"We'd like to see as much passion in House Republicans for creating jobs as we see in this investigation," he said. "We are disappointed that the committee has refused to discuss their requests with us in good faith, and has instead chosen a partisan route, proceeding with subpoenas that are unprecedented and unwarranted."

Congressional Republicans began investigating Solyndra months before the California company filed for bankruptcy protection in September and laid off 1,100 workers. The bankruptcy proved to be embarrassing for the White House amid revelations that federal officials were warned it had problems but nonetheless continued to support it, and sent President Obama to visit the company and praise it publicly.

Rep. Cliff Stearns, R-Fla., chairman of the House Energy and Commerce Oversight Subcommittee, said the subpoena was necessary because the White House is "slow-walking" all requests for information.

"We want to get to the bottom of this," he said. "What is there about the word 'slow-walk' that the Democrats don't understand?"

Rep. Diana DeGette, the top Democrat on the House Energy and Commerce Oversight Subcommittee, said that the subpoena could stymie the investigation if the White House decides to exert executive privilege.

"When you send out such a broad subpoena, it will just delay proceedings even more," she said, adding that she believes Republicans intend to use the investigation for political purposes.

Rep. Ed Markey, D-Mass., accused Republicans of hypocrisy because another GOP-led committee voted against his motion to subpoena the executives of oil companies involved in the BP oil spill who refused to appear at a hearing.

"While insisting on full disclosure and complete transparency from the White House on Solyndra, Republicans have put the CEOs from the companies  responsible for the worst offshore oil spill in our history into a witness protection program where they are apparently going to be immune from any congressional or public scrutiny," he said.

"This is not about using our subpoena power, this is about fossil fuel and nuclear interests wanting fewer Americans using solar power," he added.

On Wednesday, the government released nearly 1,200 pages of documents that revealed the Obama administration considered a bailout of Solyndra days before it collapsed.

The bailout that would have provided an infusion of cash and a new board of directors, including two directors appointed by the Energy Department.

Officials rejected the plan, which was recommended in August by the investment banking firm Lazard Ltd. Lazard was paid $1 million for analyzing options related to the faltering company.

The bailout plan considered by the Energy Department would have converted much of the U.S. loan to equity in the company worth as much as 40 percent, the emails show.

Lazard was hired to look at Solyndra's financing after the company received a $528 million loan in 2009 and $69 million in private money earlier this year in a restructuring deal approved by the Obama administration. Under the second deal, the private investors moved ahead of U.S. taxpayers in case of a default on the loan, a fact that GOP investigators have sharply criticized.

Without an infusion of new cash, Lazard wrote in an Aug. 17 memo to the Energy Department, Solyndra was almost certain to fail, which would "likely result in little recovery to the DOE." The department rejected the refinancing plan sometime after Aug. 28, and Solyndra shut its doors on Aug. 31.

White House Chief of Staff Bill Daley announced last week that he had ordered an independent review of similar loans made by the Energy Department.

He said the review by former Treasury official Herb Allison would assess the health of more than two dozen other renewable energy loans and loan guarantees made by the Energy Department program that supported Solyndra.

Allison, who oversaw the Troubled Asset Relief Program, part of the 2008 Wall Street bailout, is not looking at the Solyndra case, officials said. Instead he will evaluate other loans worth tens of billions of dollars and recommend steps to stabilize them if they appear to have similar problems.

Energy Secretary Steven Chu has said he welcomes the White House review. Chu is scheduled to testify Nov. 17 before the energy panel.

The Associated Press contributed to this report.

Read the rest of this entry »

Posted in Solyndra bankruptcy

Bankruptcy Filings Down 9 1/2 Percent in Wisconsin

Oct. 21 (Source: By Paul Gores, Milwaukee Journal Sentinel) - The pace of bankruptcy filings in Wisconsin has slowed this year — a welcome trend, but one that attorneys who deal with insolvent consumers and business people said won’t improve significantly until joblessness wanes.

Through the first nine months of 2011, federal bankruptcy filings were down 9.5% from the same time last year, to 21,167, U.S. Bankruptcy Court records show.

Most of those filings were for Chapter 7 bankruptcy, the type that wipes out debt such as credit card balances, utility bills and medical bills.

The state figures track closely with consumer bankruptcy filings nationally. Through the first three quarters in the United States, consumer filings decreased about 10%, to a little more than 1 million, the American Bankruptcy Institute reported.

Economist Jay Mueller said it makes sense that bankruptcies would start to decrease now because they lag the worst stress in the general economy, which occurred a couple of years ago.
ba
“I don’t think there is a lot to read into it other than to say there is a lag effect between a bad economy and bankruptcy filings,” Mueller, a portfolio manager for Wells Fargo Advantage Funds in Menomonee Falls, said of this year’s decrease.

Milwaukee bankruptcy attorney Robert Waud said he’s still seeing many people who have run their own business finally choose to throw in the towel. They often file for personal Chapter 7 bankruptcy.
“I’m busy. I’m seeing the same types of problems — the small-business person who doesn’t have any customers, and just a lot of people who are out of work,” said Waud, of Todd C. Esser & Associates.
Among recent bankruptcy filers at his office: cabinet makers for high-end homes and a repairer of hydraulics.

“Basically, what he did all his life was repair hydraulics on off-road machines for construction companies, and they just are not coming in the door,” Waud said.

Madison bankruptcy attorney Claire Ann Resop, of von Briesen & Roper, said she is seeing a lot of people who own small businesses that cater to minor luxuries instead of necessities, such as boutique clothing, furniture and flowers.

“I think the volume of business just doesn’t exist anymore,” she said.

Resop said the stigma of declaring bankruptcy seems to have lessened because in such a slow economy, so many have done it.

“I think the most stark change is businesspeople — higher-income people who were builders, developers, had their own business,” Resop said. “Because a lot of their acquaintances in the business, all of their professional friends, have also had to do it. They’re all in the same place. So I think they kind of look at each other and go, ‘Yeah, it’s the economy. It’s tough.’

Said Waud: “We’ve got to get people back to work before we can solve some of these problems.”

Read original article here.

Read the rest of this entry »

Posted in bankruptcy attorney , bankruptcy filings , Chapter 7 Bankruptcy , US Bankruptcy Court , wisconsin bankruptcy

UB40 Files Bankruptcy

According to an article in Rolling Stone - British reggae pop stars UB40 have declared bankruptcy. A judge in Birmingham County has ruled that the band's assets can be seized in order to help pay off their debts, which were largely accumulated by their former management company Dep International Ltd., which went into insolvent liquidation back in 2008.
Liquidators are now entitled to the band's royalty payments for their back catalog, including their hit recordings of Neil Diamond's "Red Red Wine" and Elvis Presley's "(I Can't Help) Falling In Love With You." To make matters worse, the group must also pay the costs of their case, which is estimated to be around $88,000.

UB40 have faced major financial issues for many years now. Frontman Ali Campbell left the band in 2008 along with keyboardist Mickey Virtue as a result of money issues.

Click Here to read the entire article from Rolling Stone.

Read the rest of this entry »

Posted in asset liquidation , UB40 Bankruptcy

Chinese Restaurant May Face Bankruptcy After Dog Meat Rumor

With all of the "serious" bankruptcy news making headlines these days from the LA Dodgers to the State Capital... we decided to focus on some lighter bankruptcy news ... Who hasn't heard rumors of Chinese restaurant's using "dog meat" in their recipes?

One UK Woman says, she choked on a microchip, that formerly belonged to a racing greyhound. What?!?  Here's the article as published in the UK's Telegraph -

Estelle Johnston, who has run China Rose in Bawtry, near Doncaster, for almost three decades, spoke out after hearing several versions of a similar story from friends, neighbours and customers.

She said the rumour revolves around a woman diner who apparently choked on a microchip after eating a meal during a party at the venue, which was supposedly identified later as a chip which had been from a former racing greyhound.

It has been alleged that both police and paramedics were called to the restaurant to deal with the fictitious incident, with the accusation being repeated that retired greyhounds from Sheffield were being used in the food.

Mrs Johnston branded those behind the stories 'morons' and said her manager, Eugene Chee, had called her several times to say that bookings were being cancelled as a result of people believing what they heard.

She added: "Three weeks ago I got a call from the manager saying people were ringing up to say they thought we had been closed down.

"Later there was a call from a friend in Mansfield who understood we had been closed because we had dirty kitchens.

"Then the manager rang me again to say he thought we had a serious problem, because somebody had just phoned up and said they had heard that a diner had choked in the restaurant on a microchip from a dog.

"Since then people have been ringing us up saying they want to cancel and even asking for refunds on deposits they have made on bookings for the busy Christmas period. It is a nightmare.

"It is hard enough doing business at the moment without suffering an attack like this. My first attitude was to laugh it off, but the effects it is having are actually frightening."

Mrs Johnston, who lives in Bawtry, said she and her family had spent 27 years building up China Rose's envied reputation as one of South Yorkshire's best Chinese restaurants.

This year they are celebrating their 20th anniversary at their current premises and are making arrangements for a charity fashion show which she said will not be affected by the rumours.

She added: "My manager's wife is an interpreter for the NHS and when she started to ask colleagues about it their first reaction was: 'Are you going to tell me about the dog?'

"Some other friends said they were on their way back from a holiday in Tenerife and had heard another couple in the departures lounge talking about this and I've been told it is on Facebook.

"The moronic people who start these things have no idea of the implications. It takes years to build up a good reputation but it doesn't take long to get a bad one. This could absolutely ruin us."

According to Mr Chee, China Rose is not the first restaurant to be targeted, and said he had seen internet rumours about microchips relating to other Yorkshire venues and those further afield.
However, he said it would appear that the details about the use of greyhounds, which are notoriously difficult to rehome once their racing days are over, is a new addition in the Bawtry case.

The manager, who has worked in the Chinese restaurant trade for more than two decades said: "It is complete nonsense, but people are calling and wanting to cancel because of what they have heard.
"They say they understand the RSPCA have been involved and really believe the story. They have even said they have heard that the restaurant has been boarded up and closed.

"I am still getting telephone calls from customers who have heard different versions of the story which say we have gone bankrupt or have been forced into liquidation.

"It just absolute nonsense, nothing has changed and we are still trading as normal."

Doncaster Council's environmental health team said it had not received any complaints about China Rose, but was aware of the false rumours which were circulating about the greyhound and the microchip.

Officers have been to see Mrs Johnston and her staff in a bid to stamp out the stories and are set to produce a letter which will be displayed on the premises which they hope will help to scotch the rumours.

Peter Dale, the council's director of regeneration and environment, said: "The inspection of food at the restaurant has always shown good quality, reliably sourced, meat on the premises and never any suggestion of anything unusual."

 

 

Read the rest of this entry »

Posted in chinese restaurant bankruptcy , dog meat in chinese food rumor

Harrisburg Files For Bankruptcy Protection

(Wall Street Journal)
NEW YORK—After months of contentious debate among city and state officials, Harrisburg, Pa., filed for municipal bankruptcy protection, days before the state Senate was scheduled to vote on taking over the struggling capital city's finances.

The city, which faces $300 million in debt over a failed trash incinerator project, filed the paperwork in U.S. Bankruptcy Court for the Middle District of Pennsylvania, in Harrisburg. A faxed filing late Tuesday wasn't valid, according to Terry Miller, clerk of the bankruptcy court.

The overnight fax had first been reported by Bloomberg News.

Robert Philbin, a spokesman for Mayor Linda Thompson, who had opposed such a filing, said the mayor thinks the move is unfortunate and that it will complicate matters and add to expenses for the city. Mr. Philbin said the mayor would have preferred the council come to her with an alternative plan, and pointed to a recent poll of registered Harrisburg voters showing only 13% supported a bankruptcy filing.

On Aug. 31, the city council had rejected Ms. Thompson's financial recovery plan, which opened the door for Pennsylvania Gov. Tom Corbett to make good on his threat to take over the state capital's finances.

The plan called for an 8% property tax increase and the outsourcing of some city services, but didn't seek to raise revenue with a 1% sales tax surcharge or a tax on commuters, as some city officials had suggested. The mayor had also backed the state's previous proposals to sell the incinerator, as well as the city's parking-garage system.

Mr. Corbett had pledged state funding to the city if it adopted the recovery plan and warned the state wouldn't bail out the city if it rejected the proposal.

Pennsylvania's General Assembly has passed legislation that would allow it to establish a state-run panel to operate Harrisburg, or other cities that reject recovery plans, under Act 47 for aid to distressed municipalities. The state Senate is due to take up the legislation when it reconvenes next week.
City Councilman Brad Koplinski has long advocated for a bankruptcy filing and voted in favor of the filing on Tuesday to give Harrisburg court-ordered protection from its creditors while it seeks solutions to its financial crisis. The filing was made under Chapter 9, the municipal market's equivalent of Chapter 11.

But opponents believed such a filing would likely impose significant losses on bondholders, which could have ripple effects on the state's credit rating and the broader municipal-bond market.
In addition to Mr. Koplinski, council members Susan Brown-Wilson, Wanda Williams and Eugenia Smith voted in favor of the filing, while Kelly Summerford and Patty Kim joined Gloria Martin-Roberts in opposing the action.

Harrisburg is projected to run out of cash to pay bills and cover payroll costs by the fourth quarter.
The filing had little effect on the municipal bond market Wednesday because the city's troubles had been brewing for a long time and because local-government defaults remain rare.

"This has been one of the slowest-moving train wrecks in my memory," so it isn't likely to affect the market, said Christopher Ryon, a portfolio manager at Thornburg Investment Management in Santa Fe, N.M. "For the calendar year, if you include about $500 million in Harrisburg's liability, that would be $1.6 billion of defaults, which is still very low."

Read the rest of this entry »

Posted in bankruptcy filings , bankruptcy protection , Chapter 11 Bankruptcy , harrisburg bankruptcy , Municipal Bankruptcy , US Bankruptcy Court

Living Like A Celebrity Made Me Bankrupt!

MILLIONS of women dream of living like a celebrity, but life can become a nightmare for those who splash the cash.

An epidemic of overspending among women has been called the "Kerry Katona Effect" after the reality TV star went bankrupt due to her lavish lifestyle.

In just three months this year, 14,827 women were declared bankrupt and they now account for a record level of 48 per cent of personal insolvencies.

The Sun interviewed three women whose taste for all things expensive, took their bank accounts into the negatives - here is one of their stories:

Aimee, 35

AIMEE ROBINSON lives in Bexhill, East Sussex, with builder husband Marc, 37, and son Harry, 15. She has been bankrupt twice – in 1999 and 2006. She says:

"When I look back at my celebrity obsession now, it was horrific. I loved the WAG lifestyle and Cheryl Cole in particular. That was exactly the way I wanted to live.

"When I went out, I ordered Krug champagne for £150 a bottle – because that is what the stars drink.
"Even though the outfits I bought were expensive, I only wore them once. I read all the magazines to see what they were wearing and spent £800 on Dior handbags and £500 on Jimmy Choo shoes.

"My car had to look like one a celeb would drive so I bought a Mercedes SLK sports car and paid an extra £3,000 to have the dashboard encrusted with Swarovski diamonds.

"When Jessica Simpson was pictured with her Bichon Frise dog, I decided I had to have exactly the same dog. I bought a puppy for £500... and flew to America to buy her a designer outfit.

"I paid £1,000 every few months for hair extensions, had my teeth whitened, spent £1,000 on botox, £2,000 on lip injections and had a £10,000 breast enlargement, going from a 34A to a 34DD.

"At the time of my first bankruptcy I was a single mother, working as a beautician. I maxed up my credit cards and store cards until I couldn't pay any more. I was £20,000 in debt.

"The second time I had 30 credit and store cards and debts of £85,000. I'm glad I learned my lesson, but millions more young women are going to fall into the same trap."

Read the rest of the article written by The Sun.

Read the rest of this entry »

Posted in bankrupt women , Celebrity Bankruptcy , celebrity debt

Saab Cruising Closer to Bankruptcy

The administrator in charge of Saab's restructuring under court protection could pull the plug on the process as early as Tuesday, paving the way for declaring the carmaker bankrupt, daily newspaper Svenska Dagbladet reported.

Saab has struggled for months to stave off collapse, seeking new investors and selling off assets so it could pay suppliers and employees and resume production at its plant in Sweden. But it has still not received a vital bridge loan of €70m (£61m) that was secured by Chinese car firm Youngman, money that is key to its short-term survival.

The paper said negotiations were ongoing in the Swedish capital with Youngman, but the court-appointed administrator could decide as early as Tuesday to ask a court to end Saab's period of protection from creditors.

The administrator, Guy Lofalk, could not immediately be reached for comment.

Saab spokeswoman Gunilla Gustavs said the carmaker still expected to get the bridge loan. "We are still expecting the Youngman loan to come in," Gustavs said. She had no comment on when the money was expected or how long Saab could last without the cash.

Saab won breathing space from creditors in late September, but still needs fresh money to pay wages and suppliers while it restructures.

If the restructuring process looks unlikely to succeed, Saab's creditors, the administrator or Saab itself could ask for creditor protection to be withdrawn, Cecilia Tisell, a judge at the local court, told Reuters.

She said the court had not received any request of that kind.

"No, we have not heard anything like that at all from the Saab companies or Guy Lofalk," she said.
Victor Muller, chief executive of Swedish Automobile which owns Saab, declined to comment.
Swedish Automobile shares fell 7.2% by mid-morning.

Saab had hoped protection from creditors would allow it to survive until China's authorities approve a €245m investment by car firms Zhejiang Youngman Lotus Automobile and Pangda.

A decision by China's National Development and Reform Commission could come as early as Friday.
The paper also quoted Swedish Debt Office spokesman Daniel Barr, who rejected media reports the government could pay off Saab's debt to the European Investment Bank and convert the security on the loan to shares in Saab.

"No, the Debt Office does not have any such mandate," he said.

Click Here to read the original article.

Read the rest of this entry »

Posted in carmaker bankrupt , creditor protection , Saab bankruptcy

Bankruptcy Talks Trouble AA Frequent Fliers

So, what happens to those unused frequent flier miles, if an AMR bankruptcy were to occur ?
What if you were sitting on a stash of unclaimed miles?

Thousands of frequently fliers are worried that their gold mine of AAdvantage frequent flier miles may not be worth a penny if the rocky financial situation at AMR Corp. - parent company of American Airlines continues to spiral downward.

"There’s some concern out there," said Tim Winship, publisher of FrequentFlier.com, who has received emails from worried fliers.

But if AMR were to file for protection from its creditors under Chapter 11 of the bankruptcy code, American "would continue operations more or less as normal while restructuring its debt and labor agreements," Winship said.

George Hobica, founder of travel website Airfarewatchdog.com, agreed that Chapter 11 should have little impact on frequent flier miles accrued. "Miles would be protected, since they’d keep flying," Hobica said.

Still, not everyone is as optimistic.

"People have a tendency to think of frequent flier miles as money in the bank, but it’s not like that at all," said Edward Hasbrouck, author of The Practical Nomad travel books and a policy analyst with the Consumer Travel Alliance.

Hasbrouck said American has no contractual obligations to the frequent flier mileage holder and it could change or eliminate its frequent flier program at any time - bankruptcy or not.

"If they’re in bankruptcy, the decision of whether to do so will not be made with any consideration of the interest of the frequent flier holders," he added.

Hasbrouck advises customers with miles to "use them up now" if they have the chance.

Still, at least one frequent flier isn’t ready to redeem his nest egg of nearly 1 million miles.

"I’m not worried about my stash in the slightest," said Gary Leff, co-founder of Milepoint.com, a frequent flier community, who is a lifetime Platinum AAdvantage member.

Leff said the AAdvantage program is likely profitable on a stand-alone basis and could survive as a separate entity in the unlikely event of the airline’s liquidation.

In 2010, American generated an estimated $1.37 billion in annual revenue from its frequent flier program, according to a recent report from Wisconsin-based IdeaWorks, which analyzes frequent flier and other loyalty programs.

Most of the revenue comes from frequent flier miles purchased by individual members, other airlines and program partners, including banks, the report noted.

Experts say that if the airline were to cease flying, the frequent flier program would likely continue in one form or another.

Read the rest of this entry »

Posted in American Airlines Bankruptcy , AMR Bankruptcy , Chapter 11 Bankruptcy

Friendly's Files Bankruptcy & Closes 63 Stores

Friendly's Restaurant, a 400+ restaurant chain filed for Chapter 11 bankruptcy protection on Wednesday at The United States Bankruptcy Court for the District of Delaware.

As a result of the restaurant bankruptcy filing - Friendly's closed 63 stores, each of which employed about 20 people, so about 1,260 jobs were lost.

 

The 76-year-old company known for its ice cream and hamburgers is the latest restaurant chain to file forbankruptcy, as consumers continue to eat out less, a habit they picked up during the recession, and food costs remain high.

"The strategic decision to pursue a financial restructuring will allow us to proactively and quickly improve our financial position," said CEO Harsha V. Agadi.

Friendly Ice Cream Corp., based in Wilbraham, Mass., says it has secured $70 million in financing and that its 424 remaining restaurants will stay open and pay employee salaries and benefits as it reorganizes underbankruptcy protection. Gift cards will continue to be honored. Friendly's now employs about 9,000 workers.

Read the rest of this entry »

Posted in Chapter 11 Bankruptcy , Friendly's Bankruptcy , Restaurant Bankruptcy , United States Bankruptcy Courts

Foster Law Introduces a NEW Commercial

Foster Law Offices is pleased to share our NEW Commercial with you! Watch WJET-TV to see the commercial live. We hope you enjoy it!

Read the rest of this entry »

Posted in Debt Commercial , Foster Law Offices

Anna Nicole Smith Tied to Lehman Bankruptcy?

According to an article published by The Wall Street Journal, "Yes, there is a fresh connection between the late Anna Nicole Smith and the bankruptcy case involving the shell of Lehman Brothers. Buckle up.

J.P. Morgan and the remains of Lehman Brothers are fighting out in court over charges J.P. Morgan improperly siphoned billions of dollars out of Lehman in its dying days.

But J.P. Morgan late Monday said it wants to move the case out of bankruptcy court, citing the precedent of a recent Supreme Court case that involved, yup, Anna Nicole Smith, her long-dead oil tycoon husband J. Howard Marshall and Smith’s former boyfriend and lawyer, Howard K. Stern. The case was the second time the Supreme Court had weighed in on the the long-simmering dispute over who should collect money from J. Howard Marshall’s estate.

In the June ruling that has proved contentious in bankruptcy circles, the Supreme Court said a bankruptcy court didn’t have power to decide on cases beyond bankruptcy.

At issue was whether the bankruptcy court, which awarded Smith millions of dollars, should be able to wipe out the ruling of the Texas probate court, which ruled for J. Howard Marhsall’s son. (Both Smith and Pierce Marshall have since died.)

J.P. Morgan, taking the place of Pierce Marshall this time, said its court battle with Lehman similarly belongs in a federal court — not in the same New York bankruptcy court also sorting through the leftover bits of Lehman.

Don’t worry, clients. Those high powered J.P. Morgan lawyers at Wachtell Lipton have a good excuse to expense those DVD copies of “The Anna Nicole Show.” The lawyers wrote in a court filing Monday:

“Under the Supreme Court’s recent decision in Stern v. Marshall … only this Court has the authority to adjudicate Lehman Brothers’ claims….Based on that test, the Supreme Court in Stern further held that common-law claims brought by a bankrupt debtor against its creditor could not be adjudicated by the bankruptcy court, even if the common law claims raise issues that overlap with what must be resolved in ruling on the creditor’s proof of claim. The Supreme Court’s decision in Stern prevents the bankruptcy court from adjudicating any of the causes of action asserted against JPMorgan in this lawsuit.”

(Read the J.P. Morgan court filing. Reuters also wrote earlier about J.P. Morgan’s request to move the court case.)"

Read the rest of the article published by Wall Street Journal.

Read the rest of this entry »

Posted in Anna Nicole Smith , bankruptcy court , Celebrity Bankruptcy , Lehman Brothers Bankruptcy

NJ Devils On Thin Ice Facing Possible Bankruptcy

The heavily-indebted New Jersey Devils missed a Sept. 1 loan payment, giving their lenders a breakaway chance to push the three-time NHL champion into bankruptcy, the New York Post reported Monday.

It puts the team on thin ice ahead of the opening of training camp Tuesday, with a source saying, "The Devils are blowing up."
The attendance-challenged team's financial hardships could also affect Newark's four-year-old Prudential Center, the Devils' home arena.

Team-owned Devils Arena Entertainment operates the $375 million building and guarantees the Devils' loans and, therefore, is in danger of also going bankrupt.

Two issues were complicating matters. First, principal owner Jeff Vanderbeek and co-owner Ray Chambers, each of whom owns 47 percent of the franchise, are on the way out. Chambers, through his Brick City Hockey unit, has been trying to sell his non-controlling stake in the franchise for a year.

But the efforts of Chambers and Moag & Co., a Baltimore investment bank, have been unsuccessful, despite, a source said, cutting their asking price 20 percent to $200 million. Forbes last year estimated the Devils were worth $218 million, No. 11 in the league, down two percent from 2010. The team is ranked No. 25 in attendance.

Second, Vanderbeek's relationship with the lenders is as frosty as the rink surface at The Rock, as the arena is known. The Devils have told their banks to get lost, the source said.

"You have a bank group that wants nothing to do with Vanderbeek," a source said, adding that the group has been upset with how late they have been with financial information.

Some lenders were already considering selling their stakes to vulture investors, the source said, adding, "This is going to be a very difficult situation."

If the Devils -- who along with the arena operation company owe 15 percent more than the team is worth, according to Forbes -- are declared bankrupt, lenders cannot repossess the team and force a sale for at least 180 days. One source speculated that has already happened.

The Devils' past-due loan payment of roughly $100 million is owed to a CIT-led lending group. Devils Arena Entertainment owes $180 million, the source said.

Read the rest of this entry »

Posted in bankruptcy , Hockey Bankruptcy , NJ Devils

More College Graduates Filing For Bankruptcy

A wedding ring, college degree and a well-paying job: the American dream or a recipe for bankruptcy?

Some of the factors often associated with financial success are increasingly becoming correlated with personal bankruptcy filings, a study released Tuesday by the Institute for Financial Literacy found.

The study found that from 2006 to 2010, bankruptcy filings increased among college graduates and those earning $60,000 a year or more. What’s more, last year, 64% of bankruptcy filers surveyed were married—a number that also increased from five years ago.

“The Great Recession has had a dramatic impact on the bankruptcy filings of American consumers across the economic spectrum—including college educated, high income earners,” said Leslie E. Linfield, executive director the institute. “While less educated, low income individuals continue to represent the typical bankruptcy filer, this report underscores sophisticated evolution of the profile of the American debtor that now extends to disparate age, income and ethnic groups.”

The survey collected responses from some 50,000 of individuals that filed for bankruptcy in the past five years. All respondents had sought credit counseling.

The study found that those holding a bachelor’s degree accounted for 13.58% of filings last year, up from 11.2% in 2006—a 21% increase. Those holding high school degrees still accounted for the largest percentage of filers, 36.27%, but their proportion of all filers fell by 8.6%.

Those most at risk for a bankruptcy filing were individuals who attended college but did not complete a degree, the study said. They accounted for 28.7% of filings last year.

“This we suspect is because they have all the burdens of school related debt and none of the rewards of an actual degree,” the study said.

While those earning less than $20,000 per year accounted for nearly 40% of all filings, higher-income earners saw their ranks grow in the past five years, the study found.

Those earning $60,000 or more accounted for 9.2% of all filings last years, up from 5.5% in 2006, a 67% increase.

The study found that the number of filers who were married jumped above 60% in the past five years, from 57.2% in 2006. That out paces the 50.3% of U.S. adults that are married, according to the Census.

Based in Maine, the Institute for Financial Literacy is a nonprofit organization that promotes effective financial education and counseling.

Read original article here.

Read the rest of this entry »

Posted in bankruptcy , bankruptcy filings , college bankruptcy

Kerry Katona - Celebrity Spokewoman for Going Broke??

According to a recent article published in The Sun...

KERRY Katona has been slammed for "inspiring" more women than ever to let themselves go bankrupt.

The reality TV star, 31, has been branded a "bankruptcy role model" following her well-publicised struggle to organise her finances.

And latest figures show that 14,827 women were declared broke in the second quarter of 2011 thanks to being unable to control spiralling credit and store card repayments in their bid to chase a WAG lifestyle.
Women now account for a record level of 48 per cent of personal insolvencies, with those aged 18 to 35 overtaking men for the first time.

Former I'm A Celebrity winner Kerry declared bankruptcy in 2008 over an £82,000 outstanding tax bill.
Mark Sands, head of personal insolvency at RSM Tenton, said: "People blame female money troubles on almost everything from a culture of consumption to alleged 'bankruptcy role models' such as Kerry Katona.
"Spending habits and attitudes to debt have changed over the past generation at the same time that women have achieved ever greater levels of financial independence.

"As women become more and more independent, lenders see them as a more and more lucrative market.
"There's an element of truth that the offer of buying handbags with pricey store cards is sending more and more women bust."

Read the original article here.

Read the rest of this entry »

Posted in 50 cent bankruptcy , Celebrity Bankruptcy , celebrity debt , Kerry Katona bankruptcy , women in debt

Consumer Bankruptcy Filings Continue to Fall

According to the Association of Credit and Collection Professionals, August consumer bankruptcies decreased 11 percent nationwide from August 2010, according to the American Bankruptcy Institute, relying on data from the National Bankruptcy Research Center. The data showed that the overall consumer filing total for August declined to 113,432, down from the 127,028 consumer filings recorded in August 2010. Each month of 2011 has recorded fewer bankruptcies than last year.

"Consumer bankruptcies continue to decline over the past year as households deleverage and consumer credit remains tight,” said ABI Executive Director Samuel J. Gerdano. “As a result, total consumer filings will be lower in 2011 than the 1.5 million consumer cases in 2010."

The August 2011 filings also represented a less than a 1 percent decrease from the July 2011 consumer bankruptcy total of 113,470 filings. The percentage of chapter 13 filings for August was 30 percent, a one percent increase from July.

Read the rest of this entry »

Posted in american bankruptcy institute , bankrupty decline , consumer bankruptcies

US Postal Services Asks Congress for Help

After a front-page story in Saturday’s New York Times, the woes of the U.S. Postal Service are beginning to sink in. In short, the Postal Service will soon default if Congress does not take action.


Hoping to encourage legislators to step in, Postmaster Patrick R. Donahoe will address the Senate Homeland Security and Governmental Affairs Committee in a hearing Tuesday.

Thomas R. Carper, the Delaware Democrat who serves as chairman of the Senate subcommittee overseeing the Postal Service, spoke with the New York Times about the current situation.

"The situation is dire," said Carper. "If we do nothing, if we don’t react in a smart appropriate way, the postal service could literally close later this year. That’s not the kind of development we need to inject into a weak uneven economic recovery."

The dire straits the post office currently finds itself in are due in large part to the Internet age and the preferred use of e-mail over traditional mail. The change in trends has led to a significant drop in revenue for the Postal Service.

Also affecting the financial health of the Postal Service are decades of contractual promises to union workers that continue to increase the agency’s costs. According to the New York Times, labor currently represents 80 percent of the Postal Service's expenses, while it accounts for 53 percent at United Parcel Service and only 32 percent at FedEx.

The post office is currently so low on cash that it will be unable to make the $5.5 billion payment due this month to finance retirees’ future health care. It is projected that the agency will run out of money to pay employees sometime early next year. Failure to pay employees would force the agency to stop delivering the roughly three billion pieces of mail it handles weekly.

At Tuesday’s hearing, Congress will consider a number of emergency proposals to prevent the agency’s potential bankruptcy. One radical proposal would allow the Postal Service to recover billions of dollars in what it considers overpaid employee pension funds. The proposal would provide a short-term fix, but would not alleviate the crisis entirely.

Postmaster Donahoe claims the agency must also find a way to increase revenue. Ideas for doing so include things like allowing the Postal Service to deliver wine and beer or allowing commercial advertisements on postal trucks and in post offices.

The New York Times reported that Donahoe also intends to seek approval from Congress to lay off employees, an action currently prohibited by a no-layoff clause in union contracts. If given approval, the Postmaster would lay off 120,000 workers in addition to cutting 100,000 jobs through attrition.

Thus far, legislators are divided on the issue with Republicans opposing the cuts and Democrats recognizing that action must be taken. Fredric V. Rolando, President of the National Association of Letter Carriers, warned of the dangers of such partisanship when speaking with the reporters.

"This is about one of America’s oldest institutions," said Rolando. "It survived the telegraph, it survived the telephone, and we have to do everything we can to preserve it and adapt."

Read original article here.

Read the rest of this entry »

Posted in post office bankruptcy

Saab Files For Bankruptcy Protection

STOCKHOLM—Saab Automobile AB Wednesday filed for protection from its creditors, in a move that buys time for the Swedish car maker to secure additional short-term funding to restart production.

The filing, similar to a Chapter 11 filing in the U.S., wasn't unexpected. Labor unions representing employees at Saab Automobile who weren't paid last month were due Wednesday to consider forcing the company into bankruptcy proceedings so that workers could seek state unemployment benefits.

Saab would have to consider filing for bankruptcy if it isn't granted protection from its creditors, it said in its application to the district court in Vanersborg.

But Victor Muller, chairman of Saab Automobile and chief executive of parent Swedish Automobile NV, said it was too soon to speak about that. "It's not appropriate to discuss bankruptcy," he told reporters in Trollhattan.

Saab Automobile has struggled with its finances for months. Production at its plant in the Swedish town of Trollhattan has been halted since April.  continued....

CloseIn a bid to solve its long-term funding needs, the company this summer signed agreements with two Chinese com

Read the rest of this entry »

Posted in automobile bankruptcy , Chapter 11 Bankruptcy , Saab bankruptcy

1.2 Billion Dollar Offer for LA Dodgers

Frank McCourt has been offered $1.2 billion to sell the Los Angeles Dodgers to a group backed by Chinese government-owned investment banks, a person familiar with the situation told The Associated Press on Thursday.

The bid to buy the team out of bankruptcy, which was first reported by the Los Angeles Times, was being headed by Los Angeles Marathon founder Bill Burke, said the person who requested anonymity because he was not authorized to discuss it publicly.

The bid terms, put forth in a letter sent to McCourt this week, call for an all-cash payment to buy the Dodgers, all real estate related to the team and the team's media rights. The offer is roughly $800 million more than what McCourt paid for the Dodgers in 2004 at more than $430 million.

The letter, which was presented on behalf of the Burke group by Signal Capital Management of New York, said funding for the bid would come from "certain state-owned investment institutions of the People's Republic of China" as well as unidentified American investors, the newspaper reported.

The bid would expire in 21 days, according to the letter, with the goal of closing a deal within 90 days, subject to the approvals of the bankruptcy court and Major League Baseball.

Burke and a McCourt spokesman, Steve Sugerman, did not return calls from the AP seeking comment.

The proposed sale price would break a record for a Major League Baseball team that had been set two years ago when the Ricketts family paid $845 million to buy the Chicago Cubs from Tribune Co. The participation of overseas investors in the team's ownership would not be unprecedented, with the Seattle Mariners' ownership group including a significant Japanese presence.

Dodgers third baseman Casey Blake is having season-ending surgery to repair a pinched nerve in his neck.

Yankees-Red Sox: A.J. Burnett kept the New York Yankees close, Russell Martin put them ahead with a two-run double, and Mariano Rivera nailed down a satisfying victory over host Boston.

The Yankees trailed 2-1 when Burnett left, then scored three times in the seventh off Alfredo Aceves (9-2) in a tense game that took 4 hours, 21 minutes.

The Yankees moved within a half-game of the first-place Red Sox in the A.L. East by winning two of three in the series.

"I just had a feeling tonight he was going to get it done," New York manager Joe Girardi said of Burnett, "and he did."

Mets: The Mets said that the sale of a stake in the club to hedge fund manager David Einhorn for $200 million has fallen through, denying the flagging franchise the money needed to repay a loan from Major League Baseball and bolster its operating capital.

Marlins: Injured Florida star Hanley Ramirez has left shoulder instability, and the shortstop is contemplating offseason surgery.

Read original article here.

Read the rest of this entry »

Posted in baseball bankruptcy , LA Dodgers bankruptcy

Oprah Can't Save You From Bankruptcy

Oprah Winfrey can do a lot of things: give you a car, get you to read, inspire a hilarious “Saturday Night Live” skit. But we’ve found one crack in the legendary media maven’s track record of wins. Surprisingly, it seems she can’t save a company from bankruptcy.
In 2003, the then-talk show queen bestowed her stamp of approval on the macaroni and cheese served up by Delilah’s at the Terminal, a southern-style eatery located in Philadelphia’s Reading Terminal Market. Oprah deemed it the best mac and cheese in the country, and buzz followed.

But even Oprah’s praise and tasty southern delicacies like fried chicken and collard greens couldn’t keep Delilah’s in good financial health. Southern Girl Inc., which does business as Delilah’s at the Terminal and Delilah’s at 30th—the restaurant’s outpost at downtown Philadelphia’s 30th Street train station—sought bankruptcy protection on Friday, listing assets of up to $50,000 and debts of $500,000 to $1 million.

Despite its steep debt-to-asset ratio and inability to pay its debts as they come due, Delilah’s, which is led by President Delilah Winder, seems determined to see her company emerge from Chapter 11 intact. The company is seeking permission to tap the cash securing its debt, saying the move could fund operations at both Delilah’s locations and help the company generate $55,000 in proceeds next month. With the cash collateral in hand and the ability to pay its expenses, Southern Girl said it would be able to “facilitate its reorganization and enhance the collateral and going concern of its restaurants.”

The company also wants permission to continue paying its nine employees, calling the move “critical and essential to employee morale and future business needs.” A hearing on that request, made Tuesday, has been set for Sept. 2.

Before she was signing off on bankruptcy forms, Delilah herself had a few moments in the spotlight, going on to write her own cookbook and appear on the Food Network following the Oprah nod. But her brush with celebrity chef Bobby Flay on his competition series “Throwdown! With Bobby Flay” didn’t lend credence to Oprah’s take on Delilah’s signature dish. Flay’s version of mac and cheese took the prize in the competition.

Read original article here.

Read the rest of this entry »

Posted in bankruptcy protection , Delilahs bankruptcy , restaurant debt

Harrisburg Council Rejects Plan to Address It's Debt Crisis

Aug 31 (Reuters) - Pennsylvania's capital of Harrisburg rejected a rescue plan designed to address its debt crisis on Wednesday, in a move that could prompt a state takeover of its finances. In an 4-3 vote, the Harrisburg City Council rejected a plan put forward by Mayor Linda Thompson. The vote came less than two months after the council rejected another plan presented by a state-appointed advisor.

Harrisburg -- a city of 50,000 about 100 miles west of Philadelphia -- is one of a handful of U.S. cities and counties that have teetered toward economic collapse in the wake of the 2007-09 recession. A string of failures could rattle the $2.9 trillion U.S. municipal debt market.

The mayor has said that Harrisburg could run of money next month, meaning it could miss a Sept. 15 bond payment and be unable to pay city workers.

Read original article here.

Read the rest of this entry »

Posted in bankruptcy , harrisburg debt crisis

Unions Warns of Saab Bankruptcy If Wages Remain Unpaid

(RTTNews) - Swedish automaker Saab Automobile AB (SAAB-B,0GWL.L: News ) could be forced into bankruptcy if fails to pay wages by the end of this week, the Wall Street Journal reported Monday, citing one of the company's labor unions, IF Metall. Saab Automobile is owned by Dutch automaker Swedish Automobile N.V.

According to the WSJ report, a lawyer at IF Metall said that on August 26, Friday, Saab Automobile received requests for payment of 1,486 union members' wages for August.

The cash-starved company has seven days to pay its staff once it receives the requests, failing which, IF Metall could file for a Saab Automobile bankruptcy at the district court. The process will ensure state coverage of wages in the event of the automaker's failure. The union has three weeks to file for a bankruptcy, or its claims will fall.

Saab Automobile was due to pay its blue-collar employees on Thursday, August 25, and its white-collar workers the following day. However, the company said last Tuesday that it may be forced to postpone payments as "committed" funds from investors may not arrive in time. The company also said there could be no assurance that the necessary funding will be obtained or the funds collected.
Unionen, the union for Saab Automobile's white-collar workers, which has about 1,000 members, is now reportedly gathering from its members pay slips that have not been honored, and expects to send requests for payment to the company Tuesday.

August is said to be the third straight month that Saab Automobile has failed to pay wages on time to its approximately 3,600 employees. The company reportedly paid salaries to its workers about a week late in June and July.

Saab Automobile, which has halted production at its Trollhattan plant in Sweden since April this year due to unpaid supplier bills, was seeking to resume production during the week beginning August 29 at the earliest. It has been scrambling for short and medium-term funding to pay suppliers and employees as well as to restart production.


Sweden's Debt Enforcement Agency has reportedly started a collection process on August 16 after Saab Automobile missed a deadline to pay suppliers. More than 100 debt claims are said to have been filed against Saab with the collection agency.

Swedish Automobile, the owner of Saab Automobile, said last Friday that it will publish its financial results for the half year period on August 31 instead of the previously-announced date of August 26. The company said it was still in the process of finalizing the semi-annual report.

On the Stockholm stock exchange, SAAB-B closed Monday's trading at 129.00 Kronor, up 7.00 kronor or 5.74 percent on a volume of 42,377 shares.

Read the entire story here.

Read the rest of this entry »

Posted in automobile bankruptcy , Saab bankruptcy

Number of Small Business Bankruptcies Declined in 2011

A recent study by Equifax finds that the number of small businesses that have filed for protection under bankruptcy law has dropped by 15.32 percent from the first quarter of 2010 to the first quarter of 2011.

While the drop in bankruptcy filings over the past year is good news for small business owners, the study also found that the total number of small business bankruptcies in the first quarter of this year are 30.03 percent higher than the number of filings in the first quarter of 2008, prior to the recession.

"In light of today's shifting economic conditions, bankruptcy trends serve as a valuable prism through which to evaluate the credit health of today's small business market," said Dr. Reza Barazesh, senior vice president of Equifax Commercial Information Solutions. "Our latest analysis shows that while business failures may be on the decline, conflicting trends are still making us question if the worst is behind us."

Small businesses in search of the appropriate law for which to file their bankruptcy under can typically choose from Chapter 7, or straight bankruptcy, which involves liquidation of non-exempt assets, and Chapter 11, or the reorganization plan, which allows the company to stay operational while a payment plan is formulated.

Small business bankruptcies declined in past year

Read the rest of this entry »

Posted in bankruptcy filings , bankruptcy law , chapter 7 , small business bankruptcies

US Bankruptcy Claims Trading Hits 12-Month High

Aug 23 (Reuters) - The value of U.S. bankruptcy claims traded in July was the highest since the same month a year earlier, according to a report released on Tuesday.
The face value of traded claims rose to $3.55 billion, the highest since $12.78 billion in July 2010, according to SecondMarket, which runs a claims trading platform.

The number of claims traded slipped to 1,340 in July from 1,809 in June but the number of underlying bankruptcy cases that had claims changing hands rose to 59.

Lehman Brothers Holding Inc, the largest bankruptcy in U.S. history, led both the number of claims and the value of traded claims, as it does every month.

Other active cases included restaurant chain Perkins & Marie Callender, telecoms firm Nortel Networks Inc and HearUSA Inc, a hearing-aid maker. (Reporting by Tom Hals; Editing by Gary Hill)

See original article here.

Read the rest of this entry »

Posted in bankruptcy , bonds , claims , US Bankruptcy

Bankruptcy Filings Down 8 Percent in 2011

ATLANTA - An 8 percent decline this year in bankruptcy petitions nationwide might appear to be a positive economic sign, especially for a country rocked by stock market volatility, a credit downgrade, and continued labor and housing woes.

 

Some industry experts, however, warn that optimism is not in order. The number of bankruptcies may be down, they say, because people cannot afford to file and because there is little pressure from creditors to do so.

The result may be a mass of looming bankruptcy cases, not unlike the shadow foreclosures feared in the real estate business. If the economy does not take a sharp turn for the better, those who have been teetering on the brink of bankruptcy eventually will be forced to file. What the impact of a large number of bankruptcies would be is unclear.

Jack Williams, a Georgia State University law professor who specializes in bankruptcy, said there is no indication that the number of bankruptcies is down as a result of people being better off.

“The economy hasn’t turned,’’ he said, “and, if anything, it may be going back down.’’

In the future, he added, “we’ll see a lot more people who have weathered the storm so far but cannot hold on any longer.’’ He refers to the group as “the invisible class of debtors who can’t afford to file.’’

It can cost as little as a few hundred dollars to file for bankruptcy, but the tab can jump to several thousand dollars depending on the complexities of the filing. People who have a house, for example, would pay more.

“We see people every day who can’t afford to file,’’ said Matthew Berry of Berry & Associates, an Atlanta bankruptcy law firm.

The number of bankruptcy petitions likely will rise when the employment situation improves, Berry said. When they are back at work, financially troubled individuals will be able to pay the price to file, and they will have the income to pay their creditors.

“As they go back to work,’’ Berry said, “collectors become more aggressive, and that will force them into bankruptcy.’’

Just how many bankruptcy cases are lurking in the shadows is unknown. Experts who suspect a large number of dormant cases base their assessments on the state of the economy and the number of filings at this time, which is lower than what would be expected given the dire condition of the economy.

Shadow bankruptcy cases are a concern in the business world, too, particularly for small companies. In some case, troubled firms do not file for bankruptcy, Williams said.

Read the original article here. 

Read the rest of this entry »

Posted in bankruptcy filings , bankruptcy law firm , bankruptcy petitions

Bankruptcy Minute - Making Headlines

Court rules Mexico's Vitro can vote on inter-co debt

MEXICO CITY, Aug 15 (Reuters) - Mexican glassmaker Vitro on Monday said a court in Monterrey ruled it can vote on its own inter-company debt, a sticking point that has mired the company's bankruptcy plans in court battles with creditors.

 

UPDATE 3-U.S. solar company Evergreen files for bankruptcy

* Company struggled with falling prices on solar products

Extended Stay creditors file amended complaint against lenders

Aug 15 (Reuters) - A trust representing creditors of the bankrupt hotel chain Extended Stay America Inc has filed a complaint against Lightstone Holdings and other parties to avoid obligations arising from the loans made by them to fund the 2007 leveraged buyout (LBO) of the hotel chain.

UPDATE 3-China plays down local govt debt risks, but concerns remain

* Paper says a third of such debt to be re-booked as general corporate loans

Read the rest of this entry »

Posted in china debt , evergreen bankruptcy , extended stay america creditors , local govt risks , Mexico Vitro bankruptcy

National Enquirer, Not For Sale

Aug 15 (Reuters) - American Media Inc, publisher of the National Enquirer and Star supermarket tabloids, is no longer up for sale, after the company's owners rejected an offer from Apollo Global Management, the Wall Street Journal reported.
The company, which also publishes body-toning magazines such as Men's Fitness had informally explored a sale earlier this year, the Journal reported citing people familiar with the matter.

WSJ cited people close the matter as valuing the company at between $500 million and $720 million.

The Journal also said the company's owners are happy with the job Chief Executive David Pecker is doing and are content to remain on the sidelines for now as far as deals are concerned.

The company -- which went through a "prepackaged" bankruptcy last year -- and Apollo Global could not be immediately reached for comment.

Read the entire article here.

Read the rest of this entry »

Posted in National Enquirer bankruptcy , WSJ